Sweetgreen Inc Faces Share Decline Following Q2 Results
Sweetgreen Inc Reports Disappointing Q2 Earnings
Sweetgreen Inc (NYSE: SG) shares have taken a sharp downturn during after-hours trading after the company reported financial results that fell short of market expectations and lowered its full-year revenue guidance.
Financial Results Overview
During the second quarter, Sweetgreen generated a revenue of $185.58 million. This figure missed analysts' expectations which had projected earnings of approximately $194.34 million. Furthermore, the company reported a loss of 20 cents per share, which was significantly worse than the expected loss of 11 cents.
Sales Performance
Although total revenue showed a modest increase of 0.5% compared to the same quarter last year, the same-store sales experienced a notable decline of 7.6%. Sweetgreen did, however, manage to open nine new locations during this quarter, which is an increase from the four locations opened in the previous year's quarter.
Cash Reserves
At the end of the second quarter, the company reported approximately $168.45 million in cash and cash equivalents, a critical asset as they navigate through these challenging financial times.
Management Insights
Jonathan Neman, co-founder and CEO of Sweetgreen, addressed the disappointing results, attributing them to a combination of macroeconomic pressures, difficulties comparing to last year’s solid performance, and adjustments in their loyalty program. He expressed confidence in the company's ability to recover in the latter part of the year.
Revised Guidance for 2025
In light of the recent results, Sweetgreen lowered its revenue guidance for the full year 2025 from between $740 million and $760 million down to a new forecast of $700 million to $715 million. Analysts had previously estimated revenues of around $746.3 million for the period.
Same-Store Sales Forecast
The company also provided insight into expected same-store sales for fiscal 2025, projecting a decline of between 4% and 6%. Adjusted EBITDA is anticipated to be in the range of $10 million to $15 million.
Market Reactions
Following the announcement of the Q2 earnings report and revised guidance, Sweetgreen's shares fell dramatically, dropping 25.75% during after-hours trading to $9.36 per share.
Conclusion
Sweetgreen is currently facing considerable challenges as it adapts to various market conditions and internal transitions. With a strategic focus aimed at improving operational efficiency and customer engagement, the management remains hopeful for recovery in subsequent quarters.
Frequently Asked Questions
What were Sweetgreen's Q2 revenue figures?
Sweetgreen reported a revenue of $185.58 million in Q2.
How much did Sweetgreen's shares drop after the earnings report?
The shares fell by 25.75%, trading at $9.36 at the time of the report.
What guidance did Sweetgreen provide for 2025?
Sweetgreen lowered its revenue guidance for 2025 to between $700 million and $715 million.
What reasons did management give for the disappointing results?
Management indicated macroeconomic pressures and difficulties comparing to last year's performance influenced the results.
How many new locations did Sweetgreen open in Q2?
The company opened nine new locations in Q2, increased from four the previous year.
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